Microprocessor designer and manufacturer ARM Holdings Plc (ARMH: Quote,ARM.L) reported Wednesday a sharp increase in second-quarter profit, as royalty revenues continued to outperform the overall semiconductor industry. The shares rose about 6 percent on London Stock Exchange.
ARM said it enters the second half of the year with a "record order backlog and a robust opportunity pipeline" and expects overall dollar revenues for full year 2012 to be in line with market expectations. Second-quarter shipments of chips based on ARM-processor technology increased 9 percent to 2 billion chips from the previous year.
Total dollar license revenues increased 12 percent to $78.6 million, and represented 37 percent of Group revenues. Total dollar royalty revenues grew 15 percent year-on-year to $110 million, which represented 52 percent of the company's revenues.
However, the company said fourth-quarter royalties are harder to predict due to macroeconomic uncertainty, which may impact consumer confidence.
The designer of chips used by technology titans such as Apple (AAPL) and Samsung (SMSN.L) for their smartphones and tablets, said its quarterly profit before tax increased to 54.8 million pounds from 33.8 million pounds in the previous year.
On a per share basis, earnings were 2.83 pence, higher than 1.93 pence per share a year ago. Earnings per ADS grew to 13.3 cents from 9.3 cents in the preceding year. Excluding one-time items, normalized earnings per share increased to 3.58 pence from 2.98 pence per share reported last year.
Normalized earnings per share were 16.86 cents per ADS, compared to 14.34 cents per ADS in the year-ago quarter.
On average, eight analysts polled by Thomson Reuters expected the company to earn 14 cents per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter increased 15 percent to 135.5 million pounds from 117.8 million pounds reported for the same quarter last year. In dollar terms, revenues improved 12 percent to $213 million. Analysts estimated revenues of $205.67 million for the quarter.
Operating margin was 37.8 percent, compared to 27.1 percent a year earlier.
In addition, the directors are declaring an interim dividend of 1.67 pence per share in respect of the year 2012, an increase of 20 percent from last year, to shareholders of record on September 7, 2012, payable on October 4.
ARM shares closed Tuesday's regular trading at $22.34 on the Nasdaq.
ARM.L is currently trading at 514.5 pence, up 29.7 pence or 6.13 percent, on a volume of 4.12 million shares on the LSE.
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by RTT Staff Writer
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